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States to get Rs 22,700 crore windfall from rupee plunge, crude spike

Posted on Wednesday, September 12, 2018 by Mercedes Poole

States to get Rs 22,700 crore windfall from rupee plunge, crude spike

In Andhra, the price of both fuels was reduced by Rs 2, after petrol prices went up by Rs 3.35 and diesel by Rs 4.40 within the past three weeks.

On Monday, the ruling Bharatiya Janata Party termed the hike in petroleum products as a "momentary difficulty" owing to an worldwide crisis after the Opposition parties in the country observed a Bharat Bandh, to protest the skyrocketing fuel prices. In Hyderabad, petrol costs Rs 85.75 and diesel Rs 79.37. The increase pushed the petrol price in Delhi to Rs 80.50 per litre. The new petrol and diesel prices will be applicable from Tuesday morning (September 11). Diesel prices per litre were at Rs 72.83 in Delhi, Rs 75.68 in Kolkata, Rs 77.32 in Mumbai and Rs 76.98 in Chennai. Some pumps are offering free breakfast and tea for drivers who purchase 100 litres of diesel, while others are offering electronic appliances and 2-wheelers on the purchase of a specific quantity of fuel. Across all states, Maharashtra pays the most for petrol because of a high VAT of 39.12% in Mumbai, Thane and Navi Mumbai, while the tax rate for the rest of the state is 38.11%.

The Congress party along with other Opposition parties called a nationwide strike across the country on Monday to protest against the rising prices of petrol and diesel and the falling value of the rupee against the United States dollar.

In a masterstroke and timely decision, Chandrababu Naidu has cut down the excise duty of AP state government on the fuel prices. In Parbhani in the region, today's retails price is Rs 90.12.

Since there are no immediate elections in AP, Naidu could claim that he had understood the pain of the people and hence, took the decision, though as a matter of fact, AP has the highest Value-Added Tax on diesel and petrol. While the Centre levies excise duty at specific rates, which are Rs 19.48 a litre for petrol and Rs 15.33 a litre for diesel, states impose sales tax/VAT at ad valorem as well as specific rates, besides cess (in some states only).

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